sdcellar, please go here for the rates I’m referring to. Right now, Countrywide Bank Savings will give you 5.40% APY if your balance is between $50,000 – $2,499,999. I’m currently gettin 5.3% in my GMAC account. There are also many others offering between 5.3 and 5.4%. Also, I’m referring to getting a 30 year fixed rate so your mortgage rate wouldn’t change. Regarding the 6.2%, please ask bob2007, he got it. When I got pre-qualified a few weeks ago, i was quoted around the same # as well. So no, I’m not making up stuff.
I’m also assuming he/I stay in the house for at least 30 years. So no selling here. Also, do you think interest/savings rate will stay this low for the next 30 years? Since you get a 30 year fixed, your mortgage rate would stay the same. Over 30 year period, at what savings rate will you be breaking even? I would assume it’d be 5.75%. What’s the chance of interest rate get above 5.75% over the next 30 years? What I’m trying to calculate is over 30 years w/ this 400k, can I make my money work harder for me in a no risk way.
Sorry Rustico, the accident/lost of jobs is a bad example/reason. I might have worded my reasons/ideas badly but I’m just trying to think outside the box and try to get my money work the hardest for me. I was trying to head toward the point that cash is better than equity to me. If I understand your answer regarding HELOC, if you don’t have equity left, you can’t withdraw from the HELOC. So, if you still have that 400k in cash and you lost 400k in equity, and you have an accident/lost of job that prevent you from working for 1 year. The cash will help you sustain w/out having to worry as much. Another reason for having cash in my mind is if some GREAT opportunity comes along but you need the cash to take advantage of it and you have no equity left to withdraw(HELOC), wouldn’t cash give you that opportunity? All of this is assuming I can pay both mortgage scenario comfortably of course.
